If you made a contribution to the 529 plan, you will be able to claim a subtraction from income. If you withdrew money from your 529 plan, you may have to add the withdrawal back to your income if it was not used for educational purposes.
What is the Iowa 529 plan?
A 529 plan is a type of investment account you can use to save for qualified education expenses. 529 plans are usually sponsored by states.
What are the qualifications?
Qualified withdrawals can also be used for tuition expenses in connection with enrollment at an elementary or secondary public, private or religious school. Section 529 permits withdrawals from 529 college savings accounts up to an aggregate of $10,000 per year per student for tuition expenses in connection with enrollment at a K-12 Institution.
What are the limits?
For single filers $3,785/yr per beneficiary.
For joint filers $7,570/yr per beneficiary.
What about carryovers?
If you are an Iowa state taxpayer, a rollover of assets from your College Savings Iowa 529 account to a qualified 529 plan in another state is subject to the recapture of all previous Iowa state income tax deductions made during the life of the account.
What if I don’t use it for education expenses?
If withdrawals are not qualified, the deductions must be added back to Iowa taxable income. Adjusted annually for inflation.
Where to Enter?
- State Section
- Subtractions from Income
- Other Subtractions
- Select College Savings Iowa from drop down menu